Stites on Estates

Category Archives: Business Planning

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Regional Economic Risk and Your Personal “Plan B”

Posted in Business Planning, Life Cycle Estate and Financial Planning
Lately I’ve been thinking a lot about what a “Corporate Event” at Humana might mean for Louisville. A rosy analysis I’ve heard suggests that Aetna might buy Humana, and then move its headquarters here. We’d all love that outcome (sorry, Hartford). Other Humana transactions may have collateral effects on our city that are to put… Continue Reading

Using an LLC to Maintain Privacy When Buying Residential Property

Posted in Asset Protection, Business Planning, Estate Planning
Last week, Business First of Louisville published a report and slideshow on the top 25 largest residential real estate transactions of the first quarter of 2015 in Jefferson County. It might surprise you to know that a home bought for $646,000 was pricey enough to make the first quarter slideshow. The most expensive home on… Continue Reading

Exercising Stock Options and Selling Shares: May the Odds Be Ever in Your Favor

Posted in Business Planning, Income Tax Planning, Life Cycle Estate and Financial Planning
If you have been working since the late ‘90s, you have probably collected some great stories about exercising stock options and other equity-based compensation. Some are unqualified success stories, like the time my college roommate’s father pulled up outside the college dorm in 1998 in a brand-new zippy BMW convertible (top down, naturally), and told… Continue Reading

Noncompetition Agreements and Your Career: On the Beach When You Don’t Want to Be

Posted in Asset Protection, Business Planning, Life Cycle Estate and Financial Planning
Noncompetition agreements are a common fact of life for many of the mid- and senior-level executives I represent in estate planning, and for business owner clients with employees. Because noncompetes are such important features of the life cycle estate and financial planning landscape, I sat down with my colleague Rebecca Weis to learn more about… Continue Reading

Business Startup Issues That May Find You – Even if You Don’t Go Looking For Them

Posted in Asset Protection, Business Planning, Life Cycle Estate and Financial Planning
In my practice, I have found that a majority of my clients who create significant wealth do so through ownership of a private business or a concentrated stock position in a publicly traded company. What that means for you is that if you haven’t yet started a business or taken an ownership position in one,… Continue Reading

Trust Planning for Upside Business Potential – part 3: Repeating Liquidity Events

Posted in Business Planning, Estate Planning, Estate Tax Planning
This series on how grantor retained annuity trusts can be applied in situations with upside business potential presented an overview of how GRATs work in Part 1.  Part 2 presented a case study of how an “Entrepreneurial GRAT” could be used to substantially improve the net-of-tax risk-adjusted return for a risky venture with a new… Continue Reading

Trust Planning for Upside Business Potential – part 2: Case Study of a Long Shot

Posted in Business Planning, Estate Planning, Estate Tax Planning, Retirement Planning
As we saw in Part 1 of this series, a grantor retained annuity trust (or “GRAT”) can be a very effective way to remove the government as a 40% silent partner in the potential upside of a business venture in several types of circumstances. In the pre-2010 regime of low estate tax exemptions, two common types of circumstances were: (a) … Continue Reading

Trust Planning for Upside Business Potential – part 1

Posted in Business Planning, Estate Planning, Estate Tax Planning, Retirement Planning
The pursuit of wealth has long been part of the American Dream, and a positive feature of the current $5.34 million estate tax exemption (high by historic standards) is that entrepreneurs have more “run room” before the Federal government becomes a 40% silent partner in the upside of all the work, creativity, striving, and risk… Continue Reading

Using an LLC to Protect Assets for an Aging Parent

Posted in Asset Protection, Business Planning, Estate Planning, Retirement Planning
Willie Sutton is famous for allegedly answering a question about why he robbed banks with the brilliant retort: “Because that’s where the money is.” We can’t help but think of Sutton when we consider how commonly older, richer people become targets for economic exploitation.  Potential exploiters are many: domestic help, caregivers, economically dependent children, profligate spouses,… Continue Reading

What a single-member LLC can and can’t do to protect your rental property or business

Posted in Asset Protection, Business Planning
It’s become very common for entrepreneurs, landlords, and others to use single member LLCs in their business planning.  The single-member LLC offers some advantages of a sole proprietorship, including flexibility and a single level of income taxation.  Unlike a sole proprietorship, it keeps the business in a neater “package” that can be easier to sell… Continue Reading

Preserving family harmony by providing exit opportunities from the family business – part 2

Posted in Business Planning, Business Succession Planning, Estate Planning
In our previous post, we used a case study of the hypothetical Widget family to illustrate the unintended discord families can face when the founder’s descendants are “frozen in” to the family business.  There are many approaches the founding generation can use in its own planning to avoid “freeze-in”.  A funded buy-sell agreement can be… Continue Reading

Preserving family harmony by providing exit opportunities from the family business – part 1

Posted in Business Planning, Business Succession Planning, Estate Planning
Every stage of the family business “life cycle” presents its own distinct challenges. Entrepreneurs commonly give tremendous energy and attention to growing the business during the prime of their own careers, and rightly so. Prudent business owners also look ahead to their own retirement, and transitioning the business to a new generation of management, whether… Continue Reading